Plan focuses on eliminating certain available estate planning opportunities and increasing rates for corporations and high net worth individuals.
On November 5, 2021, the U.S. House of Representatives passed the Infrastructure Investment and Jobs Act by a vote of 228-206. The $1.2 trillion infrastructure bill, which passed the Senate by a bipartisan vote of 69-30 in August, includes funding for roads, bridges, electric vehicles, broadband, hydrogen hubs, cybersecurity, water infrastructure, and grid resilience, among other priorities. The measure will now head to President Biden’s desk for signature.
The House also passed a key procedural step that will allow the chamber to vote eventually on the Build Back Better Act, a second spending bill that provides $1.75 trillion for domestic social policy initiatives. Together, the infrastructure package and the Build Back Better Act represent a significant chunk of the Biden-Harris Administration’s social and economic agenda.
The Infrastructure Investment and Jobs Act
The infrastructure package provides $1.2 trillion, including $550 billion in completely new federal spending, for so-called “hard infrastructure” investments, creating funding opportunities across a large swath of U.S. infrastructure sectors and industries, including energy, broadband, water, transportation, electric vehicles and cybersecurity.
Funding will be provided through grants, pilot projects, R&D programs, tax exemptions, loan and loan guarantee programs, and other funding and incentive mechanisms. Federal agencies charged with administering spending and incentive programs will begin issuing directions and specifics in the coming weeks and months. Now is an important time for private sector interests to engage with U.S. policymakers on recommendations to federal agencies on priority projects that align with the new infrastructure bill. An overview of key funding opportunities follows.
- $18 billion for renewables demonstration projects; clean hydrogen, nuclear, solar, wind, and geothermal R&D programs; and hydropower and marine energy programs
- $8 billion for carbon capture and emissions reduction programs, including carbon capture and removal R&D programs, demonstration projects, and grants, and prize competitions
- $8 billion to improve grid resiliency, including through loan facilities and grants to construct transmission facilities and lines
- $4 billion to promote energy storage and recycling, including through energy storage R&D demonstration projects, battery manufacturing and recycling programs, and other energy recycling projects.
In addition to funding opportunities, the infrastructure bill will impact affected industries in the following ways:
Status of the “Build Back Better” Act
Following passage of the infrastructure bill, the House voted for the Build Back Better Act “rule,” which will govern the conditions for the chamber’s final vote on the bill. The vote on the rule represents a compromise between House Democratic progressives, who wanted to pass the infrastructure package and domestic social spending bill in tandem, and Democratic moderates who sought to delay votes on the social spending bill pending additional economic analysis by the Congressional Budget Office. The rule passed on a party line vote, with all Democrats voting in favor. Democratic moderates have publicly agreed to vote for the bill if the Congressional Budget Office confirms that it will not add to the federal budget deficit.
The House-authored Build Back Better Act includes a massive infusion of funding for climate programs and children and family programs, and healthcare programs which will be offset by tax increases on corporations and high-income individuals. Key provisions include:
The House is expected to take up the Build Back Better Act the week of November 15. However, if the House ultimately passes its version of the Build Back Better Act, then the legislation is likely to be heavily scrutinized and ultimately amended by the Senate. The bill will be considered by the Senate using that chamber’s budget reconciliation process, which requires a simple majority to pass and precludes use of the filibuster. Given Democrats’ razor-thin Senate majority and assuming no Republicans will vote for the bill, passage depends on all 50 Democratic Senators voting in support and Vice President Harris breaking the tie. Since several Senators have already announced public opposition to provisions of the House bill, the legislation will very likely be significantly amended during Senate consideration, creating opportunities for businesses, industries, and other stakeholders to weigh in and shape any eventual social spending package.
Pillsbury’s policy and regulatory team is advising clients on the Infrastructure Investment and Jobs Act and BBB to help them secure incentives on an agency-by-agency basis and across the U.S. economy. More detailed analyses on specific items in the bill will be available in the coming days and weeks at Pillsbury’s American Infrastructure Investment Resource Center (pillsburylaw.com).